Oppenheimer cuts India exposure

June 23, 2006 09:59 IST

Oppenheimer & Company runs a large pool of money in global emerging markets, including India, where they have fairly significant stake.

Chief Investment Strategist Michael Metz believes that the Indian market may not test new highs now and will trade in a rangebound manner. He does not see Indian market as a good bargain right now. The firm has lowered its exposure to India.

Excerpts from CNBC-TV18's exclusive interview with Michael Metz:

What is your sense of the global markets and where has India reached after the correction and after the little bit of a pullback that we had?

We have to remember that what was really moving the markets were leveraged participants, who were very much momentum oriented. I think they caused the decline, which I think was excessive and was a case of everyone heading towards the exit at the same time. But I think we did create the low end of the trading range and now we are searching for the higher end. I don't think it is a big move to the new highs, but it shows that the market has

found a level, which is tradable here.

What have you done with your investments in India and in that, have you lowered your exposure to this market?

We have lowered it a little while ago feeling it is way overdone. If one looks at the technical action a month or so back, it was way over-extended and I think people should look at an opportunity to get back into the market over a period of time because long returns is fine but frankly I don't think this is the right entry point right now.

What would you wait for to see as the right entry point; will it be lower levels in this market or something else?

I think it would be at lower levels because the fundamentals are reasonably good, I think there is some problem with the infrastructure and also now the issue is what will be the wealth impact and the negative impact of the decline in stock market. So I think it has to be a valuation case to attract me back to the market.